Linkbar

Monday, November 17, 2008

While I surely look back with fondness on the peace and prosperity of the 1990’s, this was a time in the history of the Democratic Party that I dare not return. The Clintonian policies of balanced budgets, fairer taxes and investments in education and infrastructure helped progressively power the economy of the 90’s, but other actions helped conservatives (Democrats included) sew the seeds of today’s financial crisis and further the decline of the middle class.

At the time, the Democrats acted like liberals on cultural issues, but Democratic leaders caved into the Republican policies on issues of Wall Street. Back then, the Democratic leadership Council was still powerful within the Party and Clinton was their leader. According to the DLC, if you weren’t a “New Democrat” you were a loser, bound to be tossed out of office and relegated to the dustbin of history. According to them, everything that went well politically was a result of their policies and when things went bad, they were always quick to say that if Democrats acted more like them, they would have won. The DLC, with Bill Clinton as chief spokesman, pushed unfair trade and essentially told blue collar workers – and America as a whole - that manufacturing jobs were expendable. They conveyed a message that blue collar workers futures were being traded for the jobs of Wall Street and the college educated. It wasn’t too hard to paint Democrats as elitist when we were guided by a core economic message that picked winners and losers.

Part of the DLC message was declaring the “era of big government is over”. True to message, in 1999, President Bill Clinton signed the Gramm-Leach-Bliley Act. (Sponsored by among others, Phil Gramm, now banking lobbyist.) This legislation repealed portions of the Glass-Steagall Act, which was enacted following the Great Depression. The Glass-Steagall Act of 1933, among other things, established the Federal Deposit Insurance Corporation (FDIC) and established banking reforms to control speculation and prohibit certain types of banks from owning other types of financial institutions. This included mixing commercial banks with investment banks and mixing banks with some of the insurance companies that are failing today. (Paragraph edited for clarity and corrections)

In the end, the DLC message and policies led to the Democrats downfall. Who wants to vote for a Democrat acting like a Republican, when you can vote for the real thing? Fortunately, when Democrats were tossed out of office, it was the DLCers who took the majority of the hit. Their ineffectual leadership, regular pandering to Republican demands and essentially making decisions based on political posturing, instead of core Democratic beliefs led to the Democrats losing control in 2002.

Thankfully, the Democratic Party is now led by the Obamas, Deans, and Bidens of the party, while and the days of Clinton, Harold Ford, Terry McAuliffe, and Joe Lieberman are over. The progressive movement regained control of the party and we seem to have grown back our confidence and spine. Unfortunately, it wasn’t soon enough to head off the financial and manufacturing melt down we are seeing today.

It is my hope that we have not only learned the political and electoral lessons of being “New Democrats” but also learned the economic lessons as well.

I think there are several reasons we see "new" Democrats now, and why Democrats won so handily. Sure, the torch has been handed, thankfully, to Dean and Obama. Dems have to get off of this "I love Bill Clinton" sycophancy, and largely, they did.

In fact, were the Republicans smarter, they would have nailed the Dems on being at fault for the financial crisis, and would have had plenty of evidence to do so. But that goes to show their understanding of economics...

Anyway, one of the reasons I think we're seeing these new Dems is also because of Dean's leadership and Plouffe's flawless campaign theory. But Obama's economic theory, at least I hope, is different from Clinton's. We shall see...

Wow...I really don't agree with that. In the 1990's, the DLC was exactly what was needed to get the Dems in control. We had lost to Reagan and Bush and needed something...anything...to counter their message.

The Dems in power in Congress were splintered and the Administration was running the show. The DLC came along and was able to craft a message that people wanted to vote for. People voted on the economy, and the DLC had lots of ideas that were used and worked.

I agree that now, it is a different message. It isn't a message of moderation, it is a message of change. When the GOP took over in the 1990's, it was because people were sick of big government and Dem control in Congress (even though the Admin was really running the show). So the Dems took a bath in 1994.

People now are realizing that Republicans in control are not the party of "little government", as they turned surpluses into deficits and are spending more than the Dems could ever dream.

People see that now, and realize that they threw out the wrong bums. Oh, and Bush is no Reagan.

But I think the DLC was needed in the 1990's and, although not liberals, the Dems were still different from Republicans!

But I think the DLC was needed in the 1990's and, although not liberals, the Dems were still different from Republicans!

I agree with that part, Andy, but I think the bigger statement is that however politically expedient the 1990s DLC was for switching control, the economic policies that came out of that era are every bit to blame, if not actually more, for our current economic crisis. For as much as I loves me some Clinton for a host of reasons, one reason I curse him is his setup of the financial system that created what we are looking at now. It created some short-term gains in wealth and prosperity. Unfortunately, it didn't last.

In the 1990's, the DLC was exactly what was needed to get the Dems in control.

The thing is, the only person who got to power was Bill Clinton. The Dems lost control.

I would argue that Clinton was elected on promising to fix the economy and pushing health care reform. These were not DLC issues, they were core Democratic issues. He also had the Clinton personality, which also had nothing to do with the DLC.

After that, he Governed as a soft Republican and his messaging helped cement the Republican idea that Government is always the problem. He deregualted, gave up on health care reform and failed to create a message that Democrats in congress could get elected on. In the end, if you didn't have Bill Clinton's communications skills, you had nothing to run on and no Democratic base to support you.

(Full disclosure: I was 10 when Clinton won in 1992. Everything I am about to say is through that prism...)

A Republican friend of mine said before the election that the reason Obama was going to win wasn't that the GOP was too far to the right. It was because they didn't try to hold the center with their ideals. People saw two "tax and spend" parties; one that wanted to tax and spend as a leftist, and one who wanted to tax and spend as a rightist (is that a word?). But people trust Democrats to "tax and spend"; we're better at it.

I've heard the same arguments about Clinton. He held the middle, but with traditional Republican "big government is the boogieman" style. He was able to win (he was a damn fine politician), but on Republican terms.

The country became innundated with both sides telling them that liberal is bad, and a peoples can only hear that for so long before it sinks in. Hence the current "do you consider yourself a liberal or a conservative" split.

Smitty, I think the Republicans tried to pin the financial crisis on the Democrats, but several things happened. Most people have a poor understanding of economics and the factors that influence what happened. This, combined with a generally poor image of many Republicans, led to most people believing it was the fault of Bush and Co.

I will be interested in seeing how Obama's economic theories play out. Time has a cover with him looking like FDR and mentions the "new" New Deal. There are plenty of economists that believe the New Deal wasn't the boon that many thought and may have prolonged the Depression. Personally, I would like to see a more cautious approach to the economy.